Diversity Under New Governance: Corporate Responses to Illinois’ Board Diversity Disclosure Law

• In Event: Gender and Race at Work

Abstract

Legislative attention to board diversity continues to grow, yet women and other underrepresented groups have made limited inroads into top organizational positions. While earlier policies relied on command-and-control tools such as quotas, recent reforms increasingly adopt disclosure-based approaches that require firms to report board composition and diversity policies. This paper examines corporate responses to this “New Governance” model through the case of the Illinois Board Diversity Law, which requires Illinois-headquartered firms to annually disclose the gender and racial composition of their boards and describe efforts to increase diversity. Analyzing 548 board diversity reports submitted by 124 firms between 2020 and 2025, we identify four organizational responses: compliance, redefinition, distraction, and defiance. Defiance is widespread: more than half of covered firms do not file reports, and some filers omit required information. Among firms that do report, most distract by emphasizing compliance with other legal obligations (e.g., equal employment opportunity requirements) or redefine diversity as skills, experiences, and perspectives rather than gender and racial representation. Substantive efforts aligned with the law’s stated goals are rare. Overall, our findings show how disclosure-based regulation can enable firms to claim compliance by meeting procedural requirements while shifting the law’s goals and inactively complying with its implicit normative nudge. This study contributes to research on legal compliance and to scholarship on the diffusion of disclosure requirements in public and private regulatory regimes.

Authors

• Megan N. Bergman, University of Illinois at Urbana-Champaign

• Eunmi Mun, University of Illinois at Urbana-Champaign